SEC Reviews Grayscale XRP Trust and Grayscale Dogecoin Trust Applications
Key Developments:
The SEC has initiated a review of Grayscale’s applications to list shares of the Grayscale XRP Trust and Grayscale Dogecoin Trust on NYSE Arca.
This follows previous SEC rejections of Solana ETFs, while Ripple continues its legal battle over the classification of XRP.
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The review process could take up to 240 days, with a final decision expected by mid-October.
SEC’s Examination of Grayscale Trusts
On February 13, the U.S. Securities and Exchange Commission (SEC) acknowledged Grayscale’s Form 19b-4 filings, marking the start of a regulatory process that could extend up to 240 days. The official review period begins once the filings are published in the SEC’s federal register, which usually happens within a few days. If the timeline proceeds as expected, a final decision regarding the approval of these trusts would be due by mid-October 2024.
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Bloomberg ETF analysts James Seyffart and Eric Balchunas project a 65% probability of approval for an XRP ETF and a 75% chance for a Dogecoin ETF by the end of 2025. These projections highlight the growing anticipation within the crypto investment community.
Regulatory Landscape and Previous SEC Decisions
The SEC’s acknowledgment of Grayscale’s trust applications follows its recent consideration of ETF applications for Litecoin and Solana. Under former SEC Chair Gary Gensler, the regulatory body had previously rejected multiple Solana ETF applications, prompting Grayscale to engage in legal action to gain approval for converting its Bitcoin trust into an ETF.
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XRP’s Legal Challenges with the SEC
The SEC’s review of the Grayscale XRP Trust application coincides with ongoing legal disputes between Ripple and the regulatory agency over the classification of XRP.
A notable legal ruling in August 2023 determined that XRP was not a security when traded on secondary markets. However, the SEC continues to assert that Ripple violated securities laws through its direct sales to retail investors. The outcome of these legal proceedings could influence the SEC’s decision on XRP-related investment products.
Dogecoin’s Potential Recognition
Dogecoin, which began as a meme-based cryptocurrency in 2013, has since gained a significant following and market presence. SEC approval of the Grayscale Dogecoin Trust could provide additional legitimacy to the asset, increasing investor confidence and adoption within mainstream financial markets.
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Conclusion
The SEC’s review of Grayscale’s XRP and Dogecoin Trust applications represents a crucial step toward potential cryptocurrency ETF expansion. While regulatory challenges remain, approval could open doors for further institutional investment in these digital assets. As the review process unfolds, investors will be closely monitoring updates from the SEC and potential legal developments that could impact the final decision.
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